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2/7/09

Here we go with this weekend's best freebie. Four quality publications are yours for the taking. Check out the offers underneath and sign up for the one (or ones) that grabs your mojo. what's more, if you get your free magazine I get a buck fifty commish for signing you on. What could possibly go wrong?

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In Caracas today, opposition to Chávez's February 15th constitutional referendum vote that will let him (and all other politicos) run again for office put on an impressive and peaceful march. The route was 10.2km long and the turnout was put at 600,000 by the organizers. That numbers sounds overexaggerated to lil ol' me, but on the other hand the gov't is bullshitting when it says the turnout was low. What with one thing and another, you can bank on there being 300,000 people in the merry parade, a very tidy number. Here's the Reuters version of the proceedings and here's how Bloomie covered the march today.

As for the opinion polls, recent ones from the more respected firms (e.g. datanalisis, which although not perfect isn't bad) put the balance in favour of the "YES" vote that Hugo wants by 51.5% to 48%, more or less, with the momentum in the YES favour. Let's see if today's march can turn the tide in any way. Friends of Otto in Venezuela witha more-or-less neutral political view say that the whole caboodle will depend on the turnout on polling day, with the more people voting the better it is for Hugo.

So the stage is set for the last week before the vote. Make no mistake, this is a big moment for Chávez and Venezuela and will set the tone for years to come. Personally it's a tough one to call, so i'll limit myself to hoping that the peaceful attitude of both Chávez supporters and opposition shown so far (with a few Molotov-esque exceptions) is extended all the way through.

I don't accept anonymous comments. Said it before and I say it again. So when they come (more often than you'd imagine) I just hit the reject button. But the one that just came in this morning is so annoying, just so asinine that it's not getting away that easily. Here it is, in its glorious entirety:

You guys follow the usual USA campaign trying to highlight all the negative you can about Latin America, so you make investments run away from our countries, keeping them poor and trying to ruin them so they can control them.

For instance, there was absolutely no coverage about the visit of George Bush to Peru during the APEC meeting on CNN; following the policy of not showing that good or important things can happen in this side of the world as well, and if they do, just ignore them or highlight the negative side.

I mean, where do you start with this? I live in South America. I've lived here for well over a decade. My wife is from here. My kids have single nationality. I'm an equities analyst. I put food on the plates of my family by talking LatAm business. Why on earth do you think that I don't want this region to develop and improve?

Anyone who bothers to read this blog for more than a day will know that I cheerlead the good guys. But why should we down here accept the samo samo gringo attitude of "they should be thankful for our investments"? If you think this blog is the 'usual USA campaign' you need to get out more.

We (yeah, "we", and no apologies for being born somewhere else) down here want Chinese investment in mining. We want the US investment in agriculture. We want the Russian investment in hydrocarbons. But we've also proved conclusively that we don't want the Bechtel style of usury water privatization in Bolivia. We don't want the Siemen's corruption and bribery techniques. We don't want the Chinese investment in mining that leads to slave labour. We don't want Texaco/Chevron deliberately spilling oil into a jungle region as it's the easiest way of making roads passable to trucks.

Regional investment should look to make a profit. Goes without saying. But the days of coming here, bribing politicos for the lucrative contract, extracting oil and giving local governments $3/bbl are now over. Or at least they will be if anonymous and others like him ever get an education. Nowadays words like justice, transparency, equity, fairness, win-win etc should be an integral part of doing business in Latin America.

If this blog has one thing to say about doing business in the region, it's all this. Nobody from gringo origins can have more respect for Latin America than this humble correspondent, though I'm glad to say that many come equal on this score. But the bottom line is simple; the world is welcome to do deals and invest in Latin America, and all you need to do to prove this is ask any reasonable Latino. But not at any price. Not any more. Come and play fair and you're welcome. Come to screw us over and you can crawl back to the sewer you came from right now.

A kind reader has sent along a no-fuss, direct link to that "Sales in Recession" note offered by Oracle that I highlighted yesterday, so you can now get your copy without all that form-filling. Here's the link.

2/6/09

All fun down here, as the likelihood of the Obama stimulating the world is reflected in trading all over the region. Brazil's Bovespa is up 4%, Argentina's Merval up 3% and copper is zooming and dragging PCU, Peru and Chile out of da funk. A special mention is needed for the banks, as fun is being had all over the region in that sector. Here are a few US-traded ADRs as examples:

Peru's Credicorp (BAP) up 4%, even though it announced a crappy quarter (it was Madoffed to the tune of $45m) after the bell yesterday.

Brazil's Itau (ITU) up 9%

Argentina's Grupo Galicia (GGAL) up 12%

etc(pick your own fave...plenty to choose from)

The general effect of the soon-to-be stimulated States on trading has even been strong enough to see Peru's Nuevo Sol currency (PEN) strengthen against the greenback after its surprise (for some at least, hahaha) rate cut last night. Proof, if needed, that the US economy still calls the LatAm tune bigtime.

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Well it's important in any type of share, but the question was raised this morning in a mail from reader CR, who basically asked me why I mentioned volume traded so much in the updates and stuff. It's one of those more basic principals that plenty out there have incorporated, but all the same it's important to get the idea. So to illustrate in a simple manner, here's the chart of Condor Resources (CN.v) over the last five days to today.

CN.v isn't a bad company as such, but it has been unlucky in drilling dusters at two copper projects (one in Peru, one in Chile). The share price has suffered greatly due to this and a lack of cash at bank, so here it is now in the penny-range. It should also be pointed out that the company itself is highly repeat highly unlikely to be involved in any short-term PPS movements. This is just an example of some 3rd party speculator having a pop at an easily moveable stock.

And moveable it is: Because of the light volumes and low price some dude is able to scoop up maybe $12,000 worth of shares (it traded 167k shares yesterday) and then pop the stock a full 50% by buying the next ask offered at 13c. Cut to today and the price drops like a stone, but not before some of those cheaper shares are offloaded at a profit.

It should be added that it remains to be seen whether speculator X will be able to unload the rest at a profit, but the idea is clear; buy into low volume pennystocks and you run the risk of being on board a real rollercoaster ride and also being thrown around by a single smalltime player. This is why volume traded (preferably between several different hands) is doubly important in the microdot share price world. Be careful out there.

News out of Яussia is that Яussian PM and Abba fan, Vladimir Putin, has just given the final go-ahead-all-clear-let's-do-this-crazy-thing-one-time to the Bilateral private bank to be set up by his motherland and a place called Venezuela, which is in Latin America somewhere so they tell me.

The bank is to be a private enterprise with its HQ in Moscow and a branch in Caracas. It will be jointly funded and aims to offer capital to corporate projects in the hydrocarbons, electricity, mining, metallurgy, infrastructure, mechanics and petrochemicals sectors, according to the official stuff from Яussian infoagents Novosti today.

I'm sorry, did that say "mining"? Now how on earth might Яussia invest in the Venezuelan mining industry? What opportunities are there in the sector right now? Hmmm....can't think of a single one......any ideas spring to mind, Mr. Salamis?

Finally, if you think banking in CommieHeaven Hugolandia is a dumb deal to get into check out this report today about how Venezuela's second largest bank, Mercantil, raised profits by 22.5% in 2008, which sure beats the heel out of WaMu's performance this year. And the US still tries to tell us down here how to run our economies........

Dorato Resources UNCH at $0.75, and hey wow!, look what turned up on Canadian Insider this morning.

Feb 05/09

Feb 05/09

Bedoya, Jorge Arturo

Direct Ownership

Common Shares

10 - Disposition in the public market

-35,000

$0.750

Expect more of this kind of "animals (ahem) leaving sinking ships" action, dudettes and dudes.

Southern Copper (PCU) up 5% at $15.91. Along with its sister FCX (up 4.6%) enjoying the small pop in spot copper this morning. Apparently market maevens say things are getting better in China. Otto sez these maevens should read Brad Setser more often.

Exeter Resources (XRA) down 10.8% at U$2.09 on raised (though not heavy) volume. Otto hopes that those who sell today will learn from today's market lesson.

Nadagold (NG) down 6% at $3.48 and my short position taken yesterday starts off on the right foot. No reason to cover yet....gonna ride this flea-ridden dog down some more.

Cosan (CZZ) up 5.75% at $3.64, a nice pop on the bullish atmosphere for sugar. I own. I very like.

Yesterday, security firm Forza (part of the Swiss Securitas Group) was highlighted in this report from Reuters as at least part of the band of thugs that tortured Peruvian locals at the Monterrico Metals (MNA.L) mining camp in North Peru. As regular readers will recall, the accusations against Monterrico are very serious and include murder on the list.

However, did you also know that Forza is used by a whole bunch of foreign companies in the length and breadth of Peru? The list is long and includes names such as

And plenty plenty others. In fact all the following all use Forza as security personnel, so if you think that the kind of brutality shown by this bunch of bastards is not right for your investment dollar, why not send a mail to your fave IR department and demand that they rescind their contract with Forza immediately?

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